Tracking Progress on the Six Purpose & Stakeholder Governance (PSG) Standards

But commitments on paper don’t create credibility on their own. Companies also need concrete ways to evaluate whether purpose is integrated, stakeholders are heard, grievances are addressed, communications are honest, leaders are accountable, and performance is transparent.

This post outlines clear, actionable metrics for each of the six PSG standards. Whether you’re a micro-business starting small or a multinational scaling stakeholder oversight, these indicators can help you measure what matters, improve over time, and show stakeholders that your governance is more than words on paper.

PSG1: Establishing a Public Purpose

A clear public purpose is the foundation of stakeholder governance. Building on the B Corp Legal Requirement, which asks companies to include a purpose in their articles of association, PSG1 goes further. It requires every company to adopt and publish a purpose statement that is public-facing, specific to the business, and expresses its unique reason to exist.

The idea is to ensure companies have a clear, business-relevant purpose to guide their work and clarify for stakeholders where the company’s main focus will be. That statement must also define the positive impact the company intends to make, align with its strategic direction, and be endorsed at the highest level of governance. Done well, it’s more than words on a website; it becomes a north star for decision-making, a tool for accountability, and a lens for brand consistency.

Why it matters: A clear purpose provides a framework for measuring whether strategy and operations are advancing impact (not just profit). It helps reduce mission drift, ensuring that decisions stay true to the company’s stated commitments. It strengthens alignment between employees and stakeholders, creating a shared sense of direction. And it builds credibility in the market by demonstrating consistency between the company’s words and actions.

How to measure progress on PSG1

1. Presence of a documented purpose statement (Y/N). A written and public statement prevents an organization’s purpose from lingering in the aspirational. Confirm that the company has an approved, published purpose defining its intended positive impact, integrated into business strategy, and endorsed by the highest governing body. While you’re at it, ensure that it’s easy to find (e.g., on the website), formally communicated internally, and referenced by leadership in external communications.

2. % of employees who can accurately articulate the company’s purpose. Purpose must live beyond the boardroom. Use engagement or culture surveys to ask employees (anonymously) to describe the company’s purpose in their own words, then compare responses to the official statement. Set a target threshold (e.g., 70% accuracy in year one) and re-measure annually to assess whether communication and training are working.

3. % of decision-making frameworks that reference purpose. Purpose should guide real choices. Audit board materials, strategic plans, and decision frameworks (e.g., investment proposals, product development criteria) to see whether purpose is explicitly referenced. Report the percentage of documents that include this alignment, and consider adding a mandatory checklist to decision templates to make the practice routine.

4. Brand alignment scores (internal + external surveys). Consistency between stated purpose and lived experience builds trust. Internally, use periodic surveys with employees to gauge whether actions align with purpose. Externally, ask customers or consumers—alongside investors and partners—to describe the company’s purpose or rate how well the brand delivers on it. Comparing internal and external perceptions surfaces gaps, and tracking changes over time shows whether alignment is improving.

PSG2: Considering Stakeholders in Decision-Making

PSG2 ensures that stakeholders aren’t an afterthought, but an integral part of governance. All companies must create channels for stakeholder input and establish mechanisms to ensure their interests are considered in decision-making.

For larger companies (Large and above), the standards go further: they must adopt formal governance policies, conduct regular materiality assessments to identify the most significant issues, set targets for material topics, and ensure the highest governing body evaluates tradeoffs between shareholder and stakeholder needs.

Why it matters: Embedding stakeholder perspectives into governance leads to more resilient, informed decisions. It reduces blind spots, strengthens trust with communities and partners, and helps companies anticipate risks before they escalate. Organizations that consistently consider stakeholder impacts demonstrate leadership capacity that goes beyond short-term shareholder returns.

How to measure progress on PSG2

1. Existence of stakeholder engagement or feedback mechanisms (Y/N). Stakeholder governance depends on two-way communication. Confirm whether engagement channels, worker representation mechanisms, stakeholder forums, feedback loops, or consultation processes exist and are accessible to relevant groups (these might include worker hotlines, community advisory panels, supplier surveys, or customer listening sessions). Test annually to ensure stakeholders know how to use them and that procedures are available in relevant languages and formats.

2. # of stakeholder groups represented in the highest governing body, advisory councils, or governance committees. Representation makes stakeholder voices visible where it counts: at the top of decision-making. Record which stakeholder groups (workers, customers, suppliers, communities, environment, investors) are formally represented on boards, advisory councils, or governance committees. Monitor annually and address gaps by expanding representation where needed.

3. Diversity of governing body composition (identity + stakeholder type). Governing bodies that reflect both demographic and stakeholder diversity are better equipped to make balanced decisions. Conduct an annual audit, recording gender, racial/ethnic identity, and which stakeholder groups are represented. Consider prioritizing stakeholders who may have the least power or visibility to decision-makers, such as workers and farmers in the supply chain, workers of contractors, communities impacted by environmental damage, Indigenous communities, and youth or people in vulnerable situations. Compare results against targets or benchmarks, and disclose progress to strengthen credibility.

4. % of leaders trained in stakeholder-centered decision frameworks. A stakeholder-centered framework is a simple tool or checklist for weighing how decisions affect groups like workers, customers, communities, or the environment. Training equips leaders to evaluate these impacts consistently. Track completion rates among executives, managers, and board members, and use post-training surveys to assess comprehension and gather examples of how leaders have applied the frameworks in real decisions.

5. % of board/leadership decisions evaluated through a stakeholder impact lens. Leaders who document how stakeholder impacts are weighed build accountability into governance. Review meeting minutes, decision memos, or policy frameworks for evidence of impact analysis, and express this as a share of all decisions reviewed. Consider requiring a “stakeholder impact” section in every proposal to standardize the practice.

6. % of strategic decisions with documented stakeholder impact analysis. Documenting analysis creates a paper trail of accountability. Audit strategic initiatives or investment proposals to see which include explicit stakeholder impact sections. Report this as a share of all strategic decisions, and note whether identified risks and opportunities influenced final outcomes.

7. Frequency of stakeholder engagement reports. Regular reporting signals that stakeholder input is a standing commitment. Track how often findings from stakeholder engagement are reported to leadership or boards. Define a consistent cadence (e.g., quarterly, annual) and check whether reports are delivered on schedule and tied to follow-up actions.

8. # of stakeholder risks flagged during decision reviews. Early identification of risks helps companies course-correct before harm occurs. Log risks raised during governance reviews, categorize them (e.g., environmental, labor, community, customer trust), and track changes year over year. Summarize trends annually to show how risks evolve and whether mitigations are effective.

PSG3: Addressing Stakeholder Grievances

Companies that take stakeholder input seriously must also provide clear channels for addressing concerns. PSG3 requires businesses to establish grievance procedures that are safe, accessible, and transparent; track and resolve issues; and report results to leadership (and, for larger companies, to the public). These mechanisms ensure that stakeholders have a voice not only in shaping decisions but also in holding companies accountable when harms or risks arise.

Why it matters: Grievance systems are an early warning signal for risks. They give companies the chance to resolve problems before they escalate, strengthen trust with affected groups, and provide valuable intelligence about where policies or practices may be falling short. Without them, even well-intentioned organizations risk overlooking harms and undermining stakeholder confidence.

How to measure progress on PSG3

1. Existence of a grievance mechanism (Y/N). A grievance process demonstrates accountability and signals that the company takes stakeholder concerns seriously. Confirm whether there is a publicly available channel—such as an online form, hotline, or designated contact—that stakeholders can access easily. For accessibility, check whether it’s offered in relevant languages, allows anonymous submissions, and is clearly communicated to all groups who may need it.

2. # and nature of grievances submitted and resolved annually. Tracking both volume and closure rates shows whether the process is being used and whether issues are resolved in practice. Low numbers may suggest stakeholders don’t know about the system or don’t trust it, while high numbers may reveal systemic challenges. Recording the nature of grievances (e.g., type, severity, stakeholder group affected) provides deeper insight into root causes and recurring issues, helping the company target improvements more effectively.

3. Average resolution time. Long delays in addressing grievances erode trust, while swift responses demonstrate that concerns are taken seriously. Record the average time between a grievance being submitted and a resolution being communicated. Track both mean and median times to spot delays or process bottlenecks.

4. % of grievances escalated to leadership. Escalations highlight serious or recurring issues that require senior attention. Monitor what share of grievances reach senior management or the board, and categorize them by type (e.g., labor, environment, customer safety) to identify where leadership engagement is most often needed. Review patterns annually to determine whether leadership intervention is resolving root causes, and adjust policies or practices where issues persist.

5. Stakeholder satisfaction with the resolution process. Resolution isn’t only about outcomes but also about fairness and transparency. Collect feedback on whether stakeholders felt heard, protected from retaliation, and satisfied with how their concern was handled. Follow-up surveys or interviews can also test confidence in the grievance system as a whole.

PSG4: Engaging in Responsible Marketing & PR

Marketing and communications don’t just tell a company’s story; they shape how the world judges its integrity. PSG4 requires businesses to back their claims with evidence, communicate impacts honestly, and avoid the shortcuts of greenwashing.

When marketing is done responsibly, it builds lasting credibility and trust. When it isn’t, it undermines stakeholder confidence and can trigger real reputational and regulatory consequences.

Why it matters: In today’s climate of heightened skepticism, credibility has become a form of currency. Stakeholders are quick to spot inconsistencies, and brands that fall short face reputational risk. Responsible marketing ensures a company’s public voice reflects its actual performance. That honesty builds trust with stakeholders and reinforces credibility—even when shortcomings are acknowledged alongside successes.

How to measure progress on PSG4

1. % of claims reviewed through formal internal review or external verification. Under PSG4, all environmental and social claims must be precise, verifiable, and substantiated with reliable or scientific data. From certification onward, companies are expected to follow that standard for 100% of claims. To ensure ongoing compliance, track the percentage of claims that have gone through a formal internal review process or independent third-party verification. Regular auditing helps surface gaps early, reinforces credibility, and protects against greenwashing.

2. Error rate and correction quality. Track how many marketing or PR claims required correction or withdrawal each year, alongside how quickly and transparently they were addressed. A low error rate suggests strong review systems, while timely and visible corrections demonstrate accountability when mistakes do occur. Analyzing root causes—such as inadequate fact-checking or overzealous copy—helps prevent repetition.

3. Stakeholder trust/brand credibility survey scores. Trust is the outcome of accurate, transparent communication. Use periodic surveys with customers, employees, investors, and community partners to measure perceptions of honesty and credibility. Questions can be simple—for example, asking whether stakeholders believe the company delivers on what it promises. Track changes over time and compare against industry peers.

4. External watchdog or ESG rating outcomes. Companies should pursue independent assessment of their marketing practices where possible, whether through ESG raters, consumer watchdogs, or advertising standards boards. Track both the scores and the accompanying commentary, and monitor changes over time. External benchmarks not only highlight gaps but also strengthen credibility with stakeholders by showing that claims have been independently verified.

PSG5: Embedding Oversight in Governance & Leadership

For purpose and stakeholder governance to matter, it can’t be delegated or symbolic—it has to be owned at the top. PSG5 puts the highest governing body and executive team on the hook: formal oversight of purpose and impact, regular reviews of performance, and leadership incentives tied to social and environmental outcomes. For larger companies, accountability extends further, cascading down to managers as well.

Why it matters: Leadership sets the tone for the entire organization. When the highest governing body and executives embed impact into their mandates and incentives, they signal that social and environmental outcomes are as central as financial ones. This strengthens accountability and ensures purpose is translated into day-to-day decisions at every level of leadership.

How to measure progress on PSG5

1. Existence of a governing body charter or terms of reference with explicit stakeholder responsibilities (Y/N). Oversight starts with clear rules of the game. Confirm whether the board’s charter or terms of reference explicitly assigns responsibility for stakeholder governance, purpose, and impact. This formalization ensures accountability survives leadership turnover.

2. % of board meetings where purpose and stakeholder governance are reviewed. Oversight only matters if it’s active. Track the share of board or governance meetings that include review of purpose, impact, or stakeholder governance on the agenda. Aim for this to be a recurring item—at least annually, ideally quarterly—and document decisions or follow-up actions.

3. % of executives and managers with impact-linked SMART targets. Accountability should extend across the leadership team. Audit performance management systems to see what percentage of executives and managers have at least one goal tied to social or environmental outcomes, and whether those goals are Specific, Measurable, Achievable, Relevant, and Time-bound (SMART). Revisit annually to update or raise ambition.

4. % of incentive pay tied to social/environmental performance. Incentives shape behavior. Track what proportion of executive or management bonuses are linked to impact-related performance, and whether this weighting increases over time compared to purely financial metrics. Make results transparent to reinforce trust.

5. % of members of the highest governing body trained on key social and environmental issues. Effective oversight requires informed decision-making. Measure how many governing body members receive training on core topics such as climate risk, human rights, equity, or sector-specific sustainability issues. Update and repeat training regularly to ensure leaders remain current.

PSG6: Ensuring Transparency

Transparency is the proof point of governance: the difference between aspiration and evidence. Commitments that aren’t disclosed risk being seen as empty promises. PSG6 requires companies to show their work: disclosing social and environmental performance, publishing impact reports that include stakeholder perspectives, and—at scale—aligning with independent third-party standards. It also asks a critical internal question: Do employees actually understand and feel equipped to carry out the company’s impact strategy? Together, these practices make accountability visible, verifiable, and credible to all.

Why it matters: Transparency prevents governance from slipping into “performance theater.” Clear reporting creates accountability inside the company, motivating leaders and workers to follow through on commitments. It also builds trust with stakeholders by making performance visible and verifiable. Over time, transparency strengthens ESG ratings and enables companies to benchmark progress against peers.

How to measure progress on PSG6

1. Completeness of impact reporting (% of relevant measures disclosed). PSG6 requires companies to disclose progress against all relevant measures of social and environmental performance, not just select highlights. Audit annual impact reports to confirm whether each relevant KPI (e.g., worker well-being, supplier practices, environmental performance) is included. Track the percentage disclosed year over year to ensure reporting becomes more complete and comprehensive over time.

2. Existence of a stakeholder-inclusive impact report (Y/N, for Large/X Large companies). For companies where PSG6.1 applies, confirm whether an impact report is published annually, approved by the highest governing body, and includes a summary of stakeholder engagement processes. If a comprehensive report isn’t produced every year, ensure that lighter interim updates are still provided annually (e.g., via the company website or topic-specific disclosures), with a full comprehensive report at least every two years.

3. % of key social and environmental issues reported publicly. PSG6 requires companies to report on all key social and environmental issues, including performance metrics, progress toward targets, and consideration of stakeholder interests. Review which issues are tracked internally and compare against what is disclosed publicly in reports or online. Calculate the percentage covered, and aim for 100% over time to ensure comprehensive transparency.

4. Alignment with third-party reporting standards (Y/N, for largest companies). For the largest companies, PSG6 requires that impact reports follow a recognized third-party standard (such as GRI) to ensure comprehensive coverage, consistency, and comparability. Track whether the company’s reporting framework aligns with such a standard, and disclose this alignment publicly to reinforce credibility.

5. Report accessibility (languages, formats, timeliness). Reports must be usable, not just published. Check whether they’re available in relevant languages, distributed in accessible formats (e.g., downloadable PDFs, web pages, large-print options), and released on a predictable schedule. Confirm that disclosed performance data is presented consistently year over year, enabling stakeholders to compare results and assess progress over time.

6. % of employees reporting readiness to enact strategy. Governance only works if workers can deliver on it. Run biennial surveys to assess whether employees understand the company’s social and environmental strategy and feel prepared to apply it in their roles. Compare results across departments to spot gaps in communication or other resources.

Turning Standards Into Accountability

Photo by Tobias Mrzyk

The six requirements of the Purpose & Stakeholder Governance Impact Topic provide a blueprint for companies to embed purpose, accountability, and stakeholder voice at the core of how they operate. But it’s metrics that turn those standards into momentum. By tracking progress on purpose clarity, stakeholder inclusion, grievance responsiveness, marketing integrity, leadership oversight, and transparency, companies can see where they stand today, close gaps over time, and demonstrate credibility to the people they affect.

When leaders track the right indicators, blind spots become visible, trade-offs get clearer, and tough decisions are grounded in evidence rather than intention. Employees see that commitments are more than talk, stakeholders recognize that their voices matter, and boards gain a sharper view of both risks and opportunities. The act of measuring transforms governance from a static framework into a living system that adapts and improves.

Over time, this discipline strengthens both impact and performance. Companies that measure purpose and accountability alongside profit build deeper trust, weather crises with greater resilience, and create durable value for all stakeholders. In this way, governance metrics become more than compliance; they’re proof that a company’s purpose is real, its leadership is accountable, and its success is shared.

Copyright B Lab U.S. & Canada

Header Photo by Denise Jans